The direct global economic impact of internet speed
At first, the internet was only viewed as a gateway to a paperless world. It would make receipts, bills, and almost every paper-crucial transaction obsolete. However, as technology progresses, and as smartphone manufacturers successfully turn their products into an inevitable part of everyday life, the internet has become an essential tool for everyone. Its absence will make everyone and everything useless: Commerce will shut down, and all forms of communications will be cut in an instant.
While strong broadband connection helps in maintaining a highly advanced country’s economic growth, a complete opposite of which can also be deemed crucial for a developing nation. This also explains why Sub-Saharan Africa and a big fraction of Southeast Asia remain economically smaller compared with their North American and European counterparts. Their governments have been sluggish in enhancing their Internet infrastructure and technology.
The rationale is simple: The globalized economy has now become overly dependent on the internet to such an extent that cost-efficient and high-quality connectivity has become a vital element not only for a country to compete with other nations, but also to become part of the commerce itself. This is why the respective economies of Southeast Asian nations with slow internet connection remain inferior to those of, say, the United States, or the United Kingdom. Laudable broadband speeds also play a key role as to why South Korea, China, Japan, and Singapore are among the nations with the biggest economies in Asia and in the world.
The Philippines, one of the nations that have been experiencing massive and impressive economic growths in the past six years, is a prime example. Economists and experts across the globe believe that the reason its growth remains slow is that its government has never invested serious efforts in improving its antiquated Internet infrastructure. Monopoly, politics, and lack of political will are still evident obstacles. There have been investors and companies that could have been its saving grace had such complications never existed. The result, despite consistent improvements in credit ratings from Moody’s, S&P, and Fitch, is an unending suffering not only from dismal Internet speeds but also from exorbitant service price.
India’s economy is also a unique case since it’s one of the biggest mobile markets in the world. Just recently, it toppled the US from being the second largest mobile market after China at 32 percent annual growth rate to 95 million total unit sale. But experts believe that a stronger internet connectivity could easily make the country at par with China. Today, it is pretty impractical for a foreign investor to put up a mobile or telco-related business here if its mobile and broadband technology remain dismal, save for companies who want to capitalize on this nationwide quandary.
In 2015, US-based firm 5BARz International (OTCQB: BARZ) decided to commence operations in India after realizing how it could help solve, if not totally eliminate, the country’s call-drop problem. Its revolutionary plug-and-play device, the only easy-to-install and environmentally friendly network extender technology on the market today, caught leading local telcos’ attention. The immediate agreement set between 5BArz and the two Tier One Indian network carriers proves that the local mobile and telco industry is serious about solving such a severe quandary.
The latest Akamai report on global Internet speeds show that economic growth is directly related to Internet connectivity quality. It reveals that countries that invested more money in expanding internet accessibility across cities are also the ones that experienced massive improvements in GDP in the past few years. This is the case with South Korea and Singapore, two nations with the fastest internet in the world and most improved economic growth rates. Lack of sincerity in laying down correct policies on upgrading internet infrastructure has also made India’s economy a bit sluggish, which is also the case with the Philippines, Laos, and other countries on the bottom ten of speed rankings.
To make it simpler, the reason small economies fail to improve and developing nations continue to grow faster is that their governments are not as agile as others in terms of introducing radical reform on the matter. Weak internet means lethargic commerce, and this is synonymous to slow industry transactions, which is a major turnoff to aggressive investors.